LAS VEGAS, March 1, 2021 /PRNewswire/ -- Scientific
Games Corporation (NASDAQ: SGMS) ("Scientific Games", "SGC" or the
"Company") today reported results for the fourth quarter and full
year ended December 31, 2020.
Barry Cottle, CEO and
President of Scientific Games, said, "While 2020 certainly had
unforeseen challenges, I couldn't be more proud of our team for
successfully navigating through them. The strong execution coupled
with the diversity of our business enabled positive cash
flow. As we start off the year, I am truly excited about the
team, products, and game franchises that should enable share gains,
deal wins, and opportunities to enter new genres. The executive
team and our Board are working purposefully to transform our
Company, capitalize on the evolving industry trends and deliver
outsized returns to our Shareholders."
Michael Eklund, Chief
Financial Officer of Scientific Games, added, "We continued to
execute, having driven cash flow improvements in the fourth quarter
despite a number of COVID-19 related restrictions to our land-based
business. The focus remains on disciplined cost and balance sheet
management. I'm confident in the opportunities for operational and
business process improvements that will drive increased cash flow
conversion and deleveraging, leading to increased stakeholder
value."
SUMMARY
CONSOLIDATED RESULTS
|
|
($ in
millions)
|
Three Months Ended
December 31,
|
|
2020
|
|
2019
|
Revenue
|
$
|
762
|
|
|
$
|
863
|
|
Net loss
|
(84)
|
|
|
(37)
|
|
Net cash provided by
operating activities
|
159
|
|
|
143
|
|
Capital
expenditures
|
48
|
|
|
78
|
|
|
|
|
|
Non-GAAP Financial
Measures(1)
|
|
|
|
Consolidated
AEBITDA
|
$
|
244
|
|
|
$
|
328
|
|
Free cash
flow
|
72
|
|
|
52
|
|
|
|
|
|
Balance Sheet
Measures
|
As of December 31,
2020
|
|
As of December 31,
2019
|
Cash and cash
equivalents
|
$
|
1,016
|
|
|
$
|
313
|
|
Total debt
|
9,303
|
|
|
8,725
|
|
Available
liquidity
|
1,269
|
|
|
906
|
|
|
|
|
|
(1) This financial
measure is a non-GAAP financial measure and is reconciled to the
most directly comparable GAAP financial measure in the accompanying
supplemental tables at the end of this release.
|
Fourth quarter 2020 Financial Highlights:
- Fourth quarter consolidated revenue was $762 million compared to $863 million in the prior year period. Total
Company revenues improved sequentially benefiting from improvements
in Gaming. Year-over year results declined as our Gaming business
was impacted by COVID-19 restrictions for casinos globally while
our Lottery, SciPlay and Digital businesses delivered growth.
- Net loss was $84 million
compared to a net loss of $37 million
in the prior year period due to lower revenue partially offset by
lower interest expense reflecting the favorable impact of 2019
refinancing activities.
- Consolidated Adjusted EBITDA ("Consolidated AEBITDA"), a
non-GAAP financial measure defined below, was $244 million which improved sequentially,
principally driven by Gaming improvements. The results compared to
$328 million in the prior year, with
the decline due to lower Gaming revenue as a result of COVID-19
disruptions. In addition, the results were impacted by a
$15 million Gaming segment charge
related to receivables credit allowances.
- Net cash provided by operating activities increased by
$16 million from the prior year
period to $159 million primarily due
to improvements in working capital activities.
- Free cash flow, a non-GAAP financial measure, increased
$20 million to $72 million from the prior year period,
benefiting from improvements in working capital and lower capex
partially offset by lower revenue.
Full Year 2020 Financial Highlights:
- Consolidated Revenue of $2.7
billion compared to $3.4
billion in the prior year as our Gaming business was
impacted by COVID-19 disruptions, partially offset by 25% SciPlay
revenue growth driven by improved player monetization, and Digital
and Lottery growth.
- Net loss was $548 million
as compared to $118 million in the
prior year. The performance was primarily due to lower revenue
coupled with higher restructuring and goodwill impairment charges,
partially offset by lower D&A and interest expense, reflecting
the favorable impact of 2019 refinancing activities.
- Consolidated AEBITDA, a non-GAAP financial measure
defined below, was $800 million
compared to $1,334 million in the
prior year. The lower Consolidated AEBITDA was driven by lower
revenue as a result of COVID-19 disruptions, partially offset by
strong SciPlay and Digital growth of 55% and 40%,
respectively.
- Net cash provided by operating activities decreased
$75 million to $471 million compared to the prior year primarily
due to lower revenue, partially offset by improved working capital,
lower interest payments and lower capex.
- For the full year 2020, the Company generated Free cash
flow, a non-GAAP financial measure, of $186 million. This was driven by disciplined cost
management and improvements to working capital activities.
BUSINESS SEGMENT
HIGHLIGHTS FOR THE THREE MONTHS ENDED DECEMBER 31,
2020
|
($ in
millions)
|
Revenue
|
|
AEBITDA
|
|
AEBITDA
Margin
|
|
2020
|
|
2019
|
|
$
|
|
%
|
|
2020
|
|
2019
|
|
$
|
|
%
|
|
2020
|
|
2019
|
|
PP
Change(1)
|
Gaming
|
$
|
286
|
|
|
$
|
445
|
|
|
(159)
|
|
|
(36)
|
%
|
|
$
|
105
|
|
|
$
|
209
|
|
|
(104)
|
|
|
(50)
|
%
|
|
37
|
%
|
|
47
|
%
|
|
(10)
|
|
Lottery
|
256
|
|
|
233
|
|
|
23
|
|
|
10
|
%
|
|
105
|
|
|
98
|
|
|
7
|
|
|
7
|
%
|
|
41
|
%
|
|
42
|
%
|
|
(1)
|
|
SciPlay
|
147
|
|
|
113
|
|
|
34
|
|
|
30
|
%
|
|
45
|
|
|
32
|
|
|
13
|
|
|
41
|
%
|
|
31
|
%
|
|
28
|
%
|
|
3
|
|
Digital
|
73
|
|
|
72
|
|
|
1
|
|
|
1
|
%
|
|
20
|
|
|
21
|
|
|
(1)
|
|
|
(5)
|
%
|
|
27
|
%
|
|
29
|
%
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PP - percentage
points.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) As
calculations are made using whole dollar numbers, actual results
may vary compared to calculations presented in this
table.
|
Key Highlights vs. Fourth Quarter 2019
- SciPlay revenue increased 30% and AEBITDA increased 41%
from the prior year driven by improved payer conversion, which
outpaced industry growth.
- Digital revenue increased 1% to $73 million. In January
2021, Michigan launched
online sports and iGaming with early results indicating 88
Fortunes was the top performer for a leading iGaming
operator.
- Gaming revenue for all of our business lines increased
sequentially from the prior quarter.
- Gaming operations handle for our active fleet was up
from the prior year period. We recently launched several new titles
on our new Kascada cabinet and saw encouraging initial play
levels.
- Lottery systems revenue was $18
million higher primarily due to stronger international
product sales.
- Instant products revenue was $5
million higher than the prior year driven by a higher mix of
contracts under our successful Scientific Games Enhanced
Partnership (SGEP) program.
LIQUIDITY
|
|
($ in
millions)
|
Three Months Ended
December 31,
|
|
|
|
2020
|
|
2019
|
|
Increase /
(Decrease)
|
Net loss
|
$
|
(84)
|
|
|
$
|
(37)
|
|
|
$
|
(47)
|
|
Non-cash adjustments
included in net loss(1)
|
210
|
|
|
202
|
|
|
8
|
|
Non-cash
interest
|
6
|
|
|
6
|
|
|
—
|
|
Changes in deferred
income taxes and other
|
(32)
|
|
|
(23)
|
|
|
(9)
|
|
Distributed earnings
from equity investments
|
—
|
|
|
2
|
|
|
(2)
|
|
Changes in working
capital accounts(1)
|
59
|
|
|
(7)
|
|
|
66
|
|
Net cash provided by
operating activities
|
$
|
159
|
|
|
$
|
143
|
|
|
$
|
16
|
|
(1) Prior year
amounts have been reclassified to conform to the current year
presentation. These reclassifications had no effect on the
previously reported net cash provided by operating
activities.
|
- Net debt, a non-GAAP financial measure, decreased by
$196 million to $8,391 million at year end 2020 versus
$8,587 million at year end 2019.
- Total liquidity at year end 2020 was $1,269 million, which is up $363 million from year end 2019. During the year,
we borrowed $530 million under SGI's
revolving credit facility, and made payments of $190 million, including a voluntary $100 million payment in the fourth quarter of
2020.
- In October 2020, the Company
amended its credit agreement that extended the Covenant Relief
Period under its revolving credit facility through the first
quarter of 2022.
- In February 2021, the company
made a $100 million voluntary
repayment under SGI's revolving credit facility.
- Capital expenditures totaled $48
million in the fourth quarter, compared to $78 million in the prior year period, and for the
full year capex was $190 million
compared to $285 million.
Earnings Conference Call
As previously announced,
Scientific Games executive leadership will host a conference call
on Monday, March 1, 2021, at
4:15 pm. EST to review the Company's
fourth quarter results. To access the call live via a listen-only
webcast and presentation, please visit
http://www.scientificgames.com/investors/events-presentations/ and
click on the webcast link under the Investor Information section.
To access the call by telephone, please dial: +1 (412) 317-5420
(U.S. and International) and ask to join the Scientific Games
Corporation call. A replay of the webcast will be archived in the
Investors section on www.scientificgames.com.
About Scientific Games
Scientific Games Corporation
(NASDAQ: SGMS) is the world leader in offering customers a fully
integrated portfolio of technology platforms, robust systems,
engaging content and services. The Company is the global
leader in technology-based gaming systems, digital real-money
gaming and sports betting platforms, table games, table products
and instant games, and a leader in products, services and
content for gaming, lottery and social gaming markets. Scientific
Games delivers what customers and players value most: trusted
security, creative entertaining content, operating efficiencies and
innovative technology. You can access our filings with the SEC
through the SEC website at www.sec.gov or through our website, and
we strongly encourage you to do so. We routinely post information
that may be important to investors on our website at
www.scientificgames.com/investors/, and we use our website as a
means of disclosing material information to the public in a broad,
non-exclusionary manner for purposes of the SEC's Regulation Fair
Disclosure (Reg FD).
The information contained on, or that may be accessed through,
our website is not incorporated by reference into, and is not a
part of, this document and shall not be deemed "filed" under the
Securities Exchange Act of 1934, as amended.
COMPANY CONTACTS
Media
Relations
|
Investor
Relations
|
Christina Karas +1
702-532-7986
|
Jim Bombassei +1
702-532-7641
|
Senior Director,
Corporate Communications
|
Senior Vice
President, Investor Relations
|
media@scientificgames.com
|
IR@scientificgames.com
|
All ® notices signify marks registered in the United States. © 2021 Scientific Games
Corporation. All Rights Reserved.
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited,
in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue:
|
|
|
|
|
|
|
|
Services
|
$
|
432
|
|
|
$
|
451
|
|
|
$
|
1,593
|
|
|
$
|
1,819
|
|
Product
sales
|
177
|
|
|
263
|
|
|
553
|
|
|
994
|
|
Instant
products
|
153
|
|
|
149
|
|
|
578
|
|
|
587
|
|
Total
revenue
|
762
|
|
|
863
|
|
|
2,724
|
|
|
3,400
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of services
(1)
|
143
|
|
|
137
|
|
|
531
|
|
|
538
|
|
Cost of product sales
(1)
|
102
|
|
|
124
|
|
|
349
|
|
|
457
|
|
Cost of instant
products (1)
|
75
|
|
|
78
|
|
|
280
|
|
|
289
|
|
Selling, general and
administrative
|
188
|
|
|
172
|
|
|
701
|
|
|
707
|
|
Research and
development
|
43
|
|
|
46
|
|
|
166
|
|
|
188
|
|
Depreciation,
amortization and impairments
|
140
|
|
|
150
|
|
|
554
|
|
|
647
|
|
Goodwill
impairment
|
—
|
|
|
—
|
|
|
54
|
|
|
—
|
|
Restructuring and
other
|
9
|
|
|
4
|
|
|
67
|
|
|
28
|
|
Total operating
expenses
|
700
|
|
|
711
|
|
|
2,702
|
|
|
2,854
|
|
Operating
income
|
62
|
|
|
152
|
|
|
22
|
|
|
546
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
Interest
expense
|
(124)
|
|
|
(142)
|
|
|
(503)
|
|
|
(589)
|
|
(Loss) earnings from
equity investments
|
(3)
|
|
|
7
|
|
|
(6)
|
|
|
24
|
|
Loss on debt financing
transactions
|
—
|
|
|
(40)
|
|
|
(1)
|
|
|
(100)
|
|
(Loss) gain on
remeasurement of debt
|
(25)
|
|
|
(12)
|
|
|
(51)
|
|
|
9
|
|
Other (expense)
income, net
|
(1)
|
|
|
—
|
|
|
(5)
|
|
|
2
|
|
Total other expense,
net
|
(153)
|
|
|
(187)
|
|
|
(566)
|
|
|
(654)
|
|
Net loss before income
taxes
|
(91)
|
|
|
(35)
|
|
|
(544)
|
|
|
(108)
|
|
Income tax benefit
(expense)
|
7
|
|
|
(2)
|
|
|
(4)
|
|
|
(10)
|
|
Net loss
|
(84)
|
|
|
(37)
|
|
|
(548)
|
|
|
(118)
|
|
Less: Net income
attributable to noncontrolling interest
|
6
|
|
|
6
|
|
|
21
|
|
|
12
|
|
Net loss attributable
to SGC
|
$
|
(90)
|
|
|
$
|
(43)
|
|
|
$
|
(569)
|
|
|
$
|
(130)
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss attributable to SGC per share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.95)
|
|
|
$
|
(0.46)
|
|
|
$
|
(6.02)
|
|
|
$
|
(1.40)
|
|
Diluted
|
$
|
(0.95)
|
|
|
$
|
(0.46)
|
|
|
$
|
(6.02)
|
|
|
$
|
(1.40)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in per share calculations:
|
|
|
|
|
|
|
|
Basic
shares
|
95
|
|
|
93
|
|
|
95
|
|
|
93
|
|
Diluted
shares
|
95
|
|
|
93
|
|
|
95
|
|
|
93
|
|
|
|
|
|
|
|
|
|
(1) Excludes
depreciation and amortization.
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited,
in millions)
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
2019
|
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,016
|
|
|
$
|
313
|
|
Restricted
cash
|
|
117
|
|
|
51
|
|
Receivables, net of
allowance for credit losses of $81 and $36, respectively
|
|
616
|
|
|
755
|
|
Inventories
|
|
191
|
|
|
244
|
|
Prepaid expenses,
deposits and other current assets
|
|
241
|
|
|
252
|
|
Total current
assets
|
|
2,181
|
|
|
1,615
|
|
|
|
|
|
|
Restricted
cash
|
|
10
|
|
|
11
|
|
Receivables, net of
allowance for credit losses of $5 and $-, respectively
|
|
20
|
|
|
53
|
|
Property and
equipment, net
|
|
415
|
|
|
500
|
|
Operating lease
right-of-use assets
|
|
94
|
|
|
105
|
|
Goodwill
|
|
3,292
|
|
|
3,280
|
|
Intangible assets,
net
|
|
1,299
|
|
|
1,516
|
|
Software,
net
|
|
227
|
|
|
258
|
|
Equity
investments
|
|
262
|
|
|
273
|
|
Other
assets
|
|
184
|
|
|
198
|
|
Total
assets
|
|
$
|
7,984
|
|
|
$
|
7,809
|
|
Liabilities and
Stockholders' Deficit:
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
44
|
|
|
$
|
45
|
|
Accounts
payable
|
|
203
|
|
|
226
|
|
Accrued
liabilities
|
|
586
|
|
|
495
|
|
Total current
liabilities
|
|
833
|
|
|
766
|
|
|
|
|
|
|
Deferred income
taxes
|
|
79
|
|
|
91
|
|
Operating lease
liabilities
|
|
77
|
|
|
88
|
|
Other long-term
liabilities
|
|
260
|
|
|
292
|
|
Long-term debt,
excluding current portion
|
|
9,259
|
|
|
8,680
|
|
Total stockholders'
deficit(1)
|
|
(2,524)
|
|
|
(2,108)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
7,984
|
|
|
$
|
7,809
|
|
|
|
|
|
|
(1) Includes $129
million and $104 million in noncontrolling interest as of December
31, 2020 and 2019, respectively.
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited,
in millions)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(84)
|
|
|
$
|
(37)
|
|
|
$
|
(548)
|
|
|
$
|
(118)
|
|
Adjustments to
reconcile net loss to cash provided by operating
activities
|
216
|
|
|
210
|
|
|
881
|
|
|
820
|
|
Changes in working
capital accounts, net of effects of acquisitions
|
59
|
|
|
(7)
|
|
|
160
|
|
|
(140)
|
|
Changes in deferred
income taxes and other
|
(32)
|
|
|
(23)
|
|
|
(22)
|
|
|
(16)
|
|
Net cash provided by
operating activities
|
159
|
|
|
143
|
|
|
471
|
|
|
546
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(48)
|
|
|
(78)
|
|
|
(190)
|
|
|
(285)
|
|
Acquisitions of
businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(13)
|
|
|
—
|
|
Distributions of
capital from equity investments
|
12
|
|
|
5
|
|
|
12
|
|
|
23
|
|
Acquisitions and
additions to equity method investments
|
(5)
|
|
|
—
|
|
|
(6)
|
|
|
(1)
|
|
Proceeds from sale of
asset and other
|
2
|
|
|
—
|
|
|
24
|
|
|
—
|
|
Net cash used in
investing activities
|
(39)
|
|
|
(73)
|
|
|
(173)
|
|
|
(263)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Payments of long-term
debt, net of proceeds
|
(111)
|
|
|
(89)
|
|
|
507
|
|
|
(397)
|
|
Payments of debt
issuance and deferred financing and offering costs
|
(1)
|
|
|
(20)
|
|
|
(10)
|
|
|
(44)
|
|
Net proceeds from
issuance of SciPlay's common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
342
|
|
Payments on license
obligations
|
(15)
|
|
|
(14)
|
|
|
(36)
|
|
|
(40)
|
|
Sale of future
revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
Net proceeds
(redemptions) of common stock under stock-based compensation plans
and other, net
|
3
|
|
|
5
|
|
|
2
|
|
|
(1)
|
|
Net cash (used in)
provided by financing activities
|
(124)
|
|
|
(118)
|
|
|
463
|
|
|
(129)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
6
|
|
|
2
|
|
|
7
|
|
|
1
|
|
Increase (decrease)
in cash, cash equivalents and restricted cash
|
2
|
|
|
(46)
|
|
|
768
|
|
|
155
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
1,141
|
|
|
421
|
|
|
375
|
|
|
220
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
1,143
|
|
|
$
|
375
|
|
|
$
|
1,143
|
|
|
$
|
375
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
Cash paid for
interest
|
$
|
136
|
|
|
$
|
158
|
|
|
$
|
471
|
|
|
$
|
549
|
|
Income taxes
paid
|
4
|
|
|
13
|
|
|
22
|
|
|
41
|
|
Distributed earnings
from equity investments
|
—
|
|
|
2
|
|
|
22
|
|
|
26
|
|
Cash paid for
contingent consideration included in operating
activities
|
—
|
|
|
3
|
|
|
4
|
|
|
26
|
|
Supplemental non-cash
transactions:
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
22
|
|
|
$
|
25
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
RECONCILIATION OF
NET LOSS ATTRIBUTABLE TO SGC TO CONSOLIDATED AEBITDA
|
AND SUPPLEMENTAL
BUSINESS SEGMENT DATA
|
(Unaudited,
in millions)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
Net Loss Attributable to SGC to Consolidated AEBITDA
|
|
|
|
|
|
|
|
Net loss attributable
to SGC
|
$
|
(90)
|
|
|
$
|
(43)
|
|
|
$
|
(569)
|
|
|
$
|
(130)
|
|
Net income
attributable to noncontrolling interest
|
6
|
|
|
6
|
|
|
21
|
|
|
12
|
|
Net loss
|
(84)
|
|
|
(37)
|
|
|
(548)
|
|
|
(118)
|
|
Restructuring and
other(1)
|
9
|
|
|
4
|
|
|
67
|
|
|
28
|
|
Depreciation,
amortization and impairments
|
140
|
|
|
150
|
|
|
554
|
|
|
647
|
|
Goodwill
impairment
|
—
|
|
|
—
|
|
|
54
|
|
|
—
|
|
Other expense,
net
|
2
|
|
|
1
|
|
|
10
|
|
|
7
|
|
Interest
expense
|
124
|
|
|
142
|
|
|
503
|
|
|
589
|
|
Income tax (benefit)
expense
|
(7)
|
|
|
2
|
|
|
4
|
|
|
10
|
|
Stock-based
compensation
|
20
|
|
|
4
|
|
|
61
|
|
|
37
|
|
Loss on debt financing
transactions
|
—
|
|
|
40
|
|
|
1
|
|
|
100
|
|
Loss (gain) on
remeasurement of debt
|
25
|
|
|
12
|
|
|
51
|
|
|
(9)
|
|
EBITDA from equity
investments(2)
|
12
|
|
|
17
|
|
|
37
|
|
|
67
|
|
Loss (earnings) from
equity investments
|
3
|
|
|
(7)
|
|
|
6
|
|
|
(24)
|
|
Consolidated
AEBITDA
|
$
|
244
|
|
|
$
|
328
|
|
|
$
|
800
|
|
|
$
|
1,334
|
|
|
|
|
|
|
|
|
|
Supplemental
Business Segment Data
|
|
|
|
|
|
|
|
Business segments
AEBITDA
|
|
|
|
|
|
|
|
Gaming
|
$
|
105
|
|
|
$
|
209
|
|
|
$
|
247
|
|
|
$
|
865
|
|
Lottery
|
105
|
|
|
98
|
|
|
389
|
|
|
404
|
|
SciPlay
|
45
|
|
|
32
|
|
|
189
|
|
|
122
|
|
Digital
|
20
|
|
|
21
|
|
|
88
|
|
|
63
|
|
Total business
segments AEBITDA
|
275
|
|
|
360
|
|
|
913
|
|
|
1,454
|
|
Corporate and
other(3)
|
(31)
|
|
|
(32)
|
|
|
(113)
|
|
|
(120)
|
|
Consolidated
AEBITDA
|
$
|
244
|
|
|
$
|
328
|
|
|
$
|
800
|
|
|
$
|
1,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Refer to
Consolidated AEBITDA definition for a description of items included
in restructuring and other.
|
(2) EBITDA from
equity investments is a non-GAAP financial measure reconciled to
the most directly comparable GAAP measure in the accompanying
supplemental tables at the end of this release. The Company
received $12 million and $34 million in cash distributions and
return of capital payments from its equity investees for the three
and twelve months ended December 31, 2020, respectively, and $7
million and $49 million in cash distributions and return of capital
payments from its equity investees for the three and twelve months
ended December 31, 2019, respectively.
|
(3) Includes
amounts not allocated to the business segments (including corporate
costs) and other non-operating expenses (income).
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
SUPPLEMENTAL
INFORMATION - SEGMENTS KEY PERFORMANCE INDICATORS AND SUPPLEMENTAL
FINANCIAL DATA
|
(Unaudited,
in millions, except unit and per unit data)
|
|
|
Three Months
Ended
|
|
December
31,
|
|
December
31,
|
|
September
30,
|
|
2020
|
|
2019
|
|
2020
|
Gaming Business
Segment Supplemental Financial Data:
|
|
|
|
|
|
Revenue by line of
business:
|
|
|
|
|
|
Gaming
operations
|
$
|
105
|
|
|
$
|
146
|
|
|
$
|
92
|
|
Gaming machine
sales
|
96
|
|
|
158
|
|
|
71
|
|
Gaming
systems
|
56
|
|
|
76
|
|
|
43
|
|
Table
products
|
29
|
|
|
65
|
|
|
25
|
|
Total
revenue
|
$
|
286
|
|
|
$
|
445
|
|
|
$
|
231
|
|
|
|
|
|
|
|
Gaming Operations
Revenue:
|
|
|
|
|
|
U.S. and
Canada:
|
|
|
|
|
|
Installed base at
period end
|
30,105
|
|
|
31,486
|
|
|
30,208
|
|
Average daily revenue
per unit
|
$
|
31.40
|
|
|
$
|
38.43
|
|
|
$
|
26.90
|
|
International:(1)
|
|
|
|
|
|
Installed base at
period end
|
32,061
|
|
|
34,370
|
|
|
33,493
|
|
Average daily revenue
per unit
|
$
|
5.38
|
|
|
$
|
9.69
|
|
|
$
|
5.65
|
|
|
|
|
|
|
|
Gaming Machine
Sales:
|
|
|
|
|
|
U.S. and Canada new
unit shipments
|
2,552
|
|
|
4,510
|
|
|
3,114
|
|
International new unit
shipments
|
5,784
|
|
|
3,266
|
|
|
1,887
|
|
New unit
shipments
|
8,336
|
|
|
7,776
|
|
|
5,001
|
|
Average sales price
per new unit
|
$
|
10,130
|
|
|
$
|
17,268
|
|
|
$
|
12,881
|
|
|
|
|
|
|
|
Gaming Machine Unit
Sales Components:
|
|
|
|
|
|
U.S. and Canada
unit shipments:
|
|
|
|
|
|
Replacement
units
|
2,050
|
|
|
3,501
|
|
|
1,523
|
|
Casino opening and
expansion units
|
502
|
|
|
1,009
|
|
|
1,591
|
|
Total unit
shipments
|
2,552
|
|
|
4,510
|
|
|
3,114
|
|
|
|
|
|
|
|
International unit
shipments:
|
|
|
|
|
|
Replacement
units
|
5,764
|
|
|
3,228
|
|
|
1,887
|
|
Casino opening and
expansion units
|
20
|
|
|
38
|
|
|
—
|
|
Total unit
shipments
|
5,784
|
|
|
3,266
|
|
|
1,887
|
|
|
|
|
|
|
|
Lottery Business
Segment Supplemental Financial Data:
|
|
|
|
|
|
Instant products
revenue by geography:
|
|
|
|
|
|
United
States
|
$
|
105
|
|
|
$
|
96
|
|
|
$
|
113
|
|
International
|
48
|
|
|
52
|
|
|
44
|
|
Instant products
revenue
|
$
|
153
|
|
|
$
|
148
|
|
|
$
|
157
|
|
|
|
|
|
|
|
Lottery systems
revenue by financial statement line item:
|
|
|
|
|
|
Services
revenue
|
$
|
66
|
|
|
$
|
56
|
|
|
$
|
55
|
|
Product sales
revenue
|
37
|
|
|
29
|
|
|
29
|
|
Total Lottery systems
revenue
|
$
|
103
|
|
|
$
|
85
|
|
|
$
|
84
|
|
|
|
|
|
|
|
Digital Business
Segment Supplemental Financial Data:
|
|
|
|
|
|
Revenue by Lines of
Business:
|
|
|
|
|
|
Sports and
platform
|
$
|
32
|
|
|
$
|
34
|
|
|
$
|
31
|
|
Gaming and
other
|
41
|
|
|
38
|
|
|
44
|
|
Total
revenue
|
$
|
73
|
|
|
$
|
72
|
|
|
$
|
75
|
|
|
|
|
|
|
|
Wagers processed
through OGS (in billions)
|
$
|
14.2
|
|
|
$
|
9.2
|
|
|
$
|
12.4
|
|
|
|
|
|
|
|
SciPlay Business
Segment Supplemental Financial Data:
|
|
|
|
|
|
Revenue by
Platform:
|
|
|
|
|
|
Mobile
|
$
|
129
|
|
|
$
|
98
|
|
|
$
|
132
|
|
Web and
other
|
18
|
|
|
15
|
|
|
19
|
|
Total
revenue
|
$
|
147
|
|
|
$
|
113
|
|
|
$
|
151
|
|
|
|
|
|
|
|
Mobile
penetration(2)
|
87
|
%
|
|
84
|
%
|
|
87
|
%
|
Average
MAU(3)
|
6.9
|
|
|
7.6
|
|
|
7.3
|
|
Average
DAU(4)
|
2.5
|
|
|
2.6
|
|
|
2.6
|
|
ARPDAU(5)
|
$
|
0.63
|
|
|
$
|
0.50
|
|
|
$
|
0.63
|
|
|
(1) Excludes the
impact of game content licensing revenue.
|
(2)Mobile
penetration is defined as the percentage of SciPlay revenue
generated from mobile platforms.
|
(3) MAU = Monthly
Active Users is a count of visitors to our sites during a month. An
individual who plays multiple games or from multiple devices may,
in certain circumstances, be counted more than once. However, we
use third-party data to limit the occurrence of multiple
counting.
|
(4) DAU = Daily
Active Users is a count of visitors to our sites during a day. An
individual who plays multiple games or from multiple devices may,
in certain circumstances, be counted more than once. However, we
use third-party data to limit the occurrence of multiple
counting.
|
(5) ARPDAU =
Average revenue per DAU is calculated by dividing revenue for a
period by the DAU for the period by the number of days for the
period.
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
(Unaudited,
in millions, except for ratio)
|
|
RECONCILIATION OF
PRINCIPAL FACE VALUE OF DEBT OUTSTANDING TO NET DEBT AND NET
DEBT LEVERAGE RATIO
|
|
|
Year
Ended
|
|
Year
Ended
|
|
December 31,
2020
|
|
December 31,
2019
|
Consolidated
AEBITDA(1)
|
$
|
800
|
|
|
$
|
1,334
|
|
Total debt
|
9,303
|
|
|
8,725
|
|
Add: Unamortized debt
discount/premium and deferred financing costs, net
|
104
|
|
|
118
|
|
Add: Impact of exchange
rate(2)
|
7
|
|
|
68
|
|
Less: Debt not
requiring cash repayment and other
|
(7)
|
|
|
(11)
|
|
Principal face value
of debt outstanding
|
9,407
|
|
|
8,900
|
|
Less:
Cash and cash equivalents
|
1,016
|
|
|
313
|
|
Net debt
|
$
|
8,391
|
|
|
$
|
8,587
|
|
Net debt leverage
ratio
|
10.5
|
|
|
6.4
|
|
|
|
|
|
Euro to USD exchange
rate at reporting date
|
1.22
|
|
|
1.12
|
|
Euro to USD exchange
rate at issuance
|
1.24
|
|
|
1.24
|
|
|
(1) Refer to the
reconciliation of Consolidated AEBITDA included in the table titled
"Reconciliation of Net Loss Attributable to SGC to Consolidated
AEBITDA."
|
(2) Exchange rate
impact is the impact of translating our outstanding 2026 Secured
Euro Notes and 2026 Unsecured Euro Notes translated at constant
foreign exchange rate at issuance of these notes as compared to the
current exchange rate.
|
|
|
RECONCILIATION OF
NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH
FLOW
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net cash provided by
operating activities
|
$
|
159
|
|
|
$
|
143
|
|
|
$
|
471
|
|
|
$
|
546
|
|
Less: Capital
expenditures
|
(48)
|
|
|
(78)
|
|
|
(190)
|
|
|
(285)
|
|
Add:
Distributions of capital from equity investments
|
12
|
|
|
5
|
|
|
12
|
|
|
23
|
|
Less: Additions to
equity method investments
|
(5)
|
|
|
—
|
|
|
(6)
|
|
|
(1)
|
|
Less: Payments on
license obligations
|
(15)
|
|
|
(14)
|
|
|
(36)
|
|
|
(40)
|
|
Less: Change in
restricted cash impacting working capital
|
(31)
|
|
|
(4)
|
|
|
(65)
|
|
|
(10)
|
|
Free cash
flow
|
$
|
72
|
|
|
$
|
52
|
|
|
$
|
186
|
|
|
$
|
233
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
(LOSS) EARNINGS FROM EQUITY INVESTMENTS TO EBITDA FROM EQUITY
INVESTMENTS
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
EBITDA from equity
investments:
|
|
|
|
|
|
|
|
(Loss) earnings from
equity investments
|
$
|
(3)
|
|
|
$
|
7
|
|
|
$
|
(6)
|
|
|
$
|
24
|
|
Add: Income tax
expense
|
2
|
|
|
2
|
|
|
4
|
|
|
9
|
|
Add: Depreciation and
amortization
|
8
|
|
|
8
|
|
|
31
|
|
|
33
|
|
Add: Interest income,
net and other
|
5
|
|
|
—
|
|
|
8
|
|
|
1
|
|
EBITDA from equity
investments
|
$
|
12
|
|
|
$
|
17
|
|
|
$
|
37
|
|
|
$
|
67
|
|
Forward-Looking Statements
In this press release, Scientific Games makes "forward-looking
statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements describe
future expectations, plans, results or strategies and can often be
identified by the use of terminology such as "may," "will,"
"estimate," "intend," "plan," "continue," "believe," "expect,"
"anticipate," "target," "should," "could," "potential,"
"opportunity," "goal," or similar terminology. These statements are
based upon management's current expectations, assumptions and
estimates and are not guarantees of timing, future results or
performance. Therefore, you should not rely on any of these
forward-looking statements as predictions of future events. Actual
results may differ materially from those contemplated in these
statements due to a variety of risks and uncertainties and other
factors, including, among other things:
- the impact of the COVID-19 pandemic and any resulting
unfavorable social, political, economic and financial conditions,
including the temporary and potentially recurring closure of
casinos and lottery operations on a jurisdiction-by-jurisdiction
basis;
- slow growth of new gaming jurisdictions, slow addition of
casinos in existing jurisdictions and declines in the replacement
cycle of gaming machines;
- risks relating to foreign operations, including anti-corruption
laws, fluctuations in currency rates, restrictions on the payment
of dividends from earnings, restrictions on the import of products
and financial instability, including the potential impact to our
business resulting from the continuing uncertainty following the
U.K.'s withdrawal from the European Union ("EU");
- difficulty predicting what impact, if any, new tariffs imposed
by and other trade actions taken by the U.S. and foreign
jurisdictions could have on our business;
- U.S. and international economic and industry conditions;
- level of our indebtedness, higher interest rates, availability
or adequacy of cash flows and liquidity to satisfy indebtedness,
other obligations or future cash needs;
- the discontinuation or replacement of LIBOR, which may
adversely affect interest rates;
- inability to reduce or refinance our indebtedness;
- restrictions and covenants in debt agreements, including those
that could result in acceleration of the maturity of our
indebtedness;
- competition;
- inability to win, retain or renew, or unfavorable revisions of,
existing contracts, and the inability to enter into new
contracts;
- the impact of U.K. legislation approving the reduction of
fixed-odds betting terminals maximum stakes limit on LBO operators,
including the related closure of certain LBO shops;
- inability to adapt to, and offer products that keep pace with,
evolving technology, including any failure of our investment of
significant resources in our R&D efforts;
- changes in demand for our products and services;
- inability to benefit from, and risks associated with, strategic
equity investments and relationships;
- inability to achieve some or all of the anticipated benefits of
SciPlay being a standalone public company;
- dependence on suppliers and manufacturers;
- SciPlay's dependence on certain key providers;
- ownership changes and consolidation in the gaming
industry;
- fluctuations in our results due to seasonality and other
factors;
- security and integrity of our products and systems, including
the impact of any security breaches or cyber-attacks;
- protection of our intellectual property, inability to license
third-party intellectual property and the intellectual property
rights of others;
- reliance on or failures in information technology and other
systems;
- litigation and other liabilities relating to our business,
including litigation and liabilities relating to our contracts and
licenses, our products and systems, our employees (including labor
disputes), intellectual property, environmental laws and our
strategic relationships;
- reliance on technological blocking systems;
- challenges or disruptions relating to the implementation of a
new global enterprise resource planning system;
- laws and government regulations, both foreign and domestic,
including those relating to gaming, data privacy and security,
including with respect to the collection, storage, use,
transmission and protection of personal information and other
consumer data, and environmental laws, and those laws and
regulations that affect companies conducting business on the
internet, including online gambling;
- legislative interpretation and enforcement, regulatory
perception and regulatory risks with respect to gaming, especially
internet wagering, social gaming and sports wagering;
- changes in tax laws or tax rulings, or the examination of our
tax positions;
- opposition to legalized gaming or the expansion thereof and
potential restrictions on internet wagering;
- significant opposition in some jurisdictions to interactive
social gaming, including social casino gaming and how such
opposition could lead these jurisdictions to adopt legislation or
impose a regulatory framework to govern interactive social gaming
or social casino gaming specifically, and how this could result in
a prohibition on interactive social gaming or social casino gaming
altogether, restrict our ability to advertise our games, or
substantially increase our costs to comply with these
regulations;
- expectations of shift to regulated online gaming or sports
wagering;
- inability to develop successful products and services and
capitalize on trends and changes in our industries, including the
expansion of internet and other forms of interactive gaming;
- the continuing evolution of the scope of data privacy and
security regulations, and our belief that the adoption of
increasingly restrictive regulations in this area is likely within
the U.S. and other jurisdictions;
- incurrence of restructuring costs;
- goodwill impairment charges including changes in estimates or
judgments related to our impairment analysis of goodwill or other
intangible assets;
- stock price volatility;
- failure to maintain adequate internal control over financial
reporting;
- dependence on key executives
- natural events that disrupt our operations or those of our
customers, suppliers or regulators;
- possibility that the 2018 renewal of the LNS concession to
operate the Italian instant games lottery is not final (pending
appeal against existing court rulings relating to third-party
protest against the renewal of the concession); and
- expectations of growth in total consumer spending on social
casino gaming.
Additional information regarding risks and uncertainties and
other factors that could cause actual results to differ materially
from those contemplated in forward-looking statements is included
from time to time in our filings with the SEC, including the
Company's current reports on Form 8-K and quarterly reports on Form
10-Q. Additional information is forthcoming in our annual report on
Form 10-K filed with the SEC for the year ended December 31, 2020 (including under the headings
"Forward Looking Statements" and "Risk Factors"). Forward-looking
statements speak only as of the date they are made and, except for
our ongoing obligations under the U.S. federal securities laws, we
undertake no and expressly disclaim any obligation to publicly
update any forward-looking statements whether as a result of new
information, future events or otherwise.
You should also note that this press release may contain
references to industry market data and certain industry forecasts.
Industry market data and industry forecasts are obtained from
publicly available information and industry publications. Industry
publications generally state that the information contained therein
has been obtained from sources believed to be reliable, but that
the accuracy and completeness of that information is not
guaranteed. Although we believe industry information to be
accurate, it is not independently verified by us and we do not make
any representation as to the accuracy of that information. In
general, we believe there is less publicly available information
concerning the international gaming, lottery, social and digital
gaming industries than the same industries in the U.S.
Due to rounding, certain numbers presented herein may not
precisely agree or add up on a cumulative basis to the totals
previously reported.
Non-GAAP Financial Measures
The Company's management uses the following non-GAAP financial
measures in conjunction with GAAP financial measures: Consolidated
AEBITDA, free cash flow, EBITDA from equity investments, and net
debt and net debt leverage ratio (each, as described more fully
below). These non-GAAP financial measures are presented as
supplemental disclosures. They should not be considered in
isolation of, as a substitute for, or superior to, the financial
information prepared in accordance with GAAP, and should be read in
conjunction with the Company's financial statements filed with the
SEC. The non-GAAP financial measures used by the Company may differ
from similarly titled measures presented by other companies.
Specifically, the Company's management uses Consolidated AEBITDA
to, among other things: (i) monitor and evaluate the performance of
the consolidated Company's business operations; (ii) facilitate
management's internal and external comparisons of the Company's
consolidated historical operating performance; and (iii) analyze
and evaluate financial and strategic planning decisions regarding
future operating investments and operating budgets.
In addition, the Company's management uses Consolidated AEBITDA
to facilitate management's external comparisons of the Company's
consolidated results to the historical operating performance of
other companies that may have different capital structures and debt
levels.
The Company's management uses EBITDA from equity investments to
monitor and evaluate the performance of the Company's equity
investments. The Company's management uses net debt and net debt
leverage ratio in monitoring and evaluating the Company's overall
liquidity, financial flexibility and leverage.
The Company's management believes that each of these non-GAAP
financial measures are useful as they provide management and
investors with information regarding the Company's financial
condition and operating performance that is an integral part of
management's reporting and planning processes. In particular, the
Company's management believes that Consolidated AEBITDA is helpful
because this non-GAAP financial measure eliminates the effects of
restructuring, transaction, integration or other items that
management believes is less indicative of the Company's ongoing
underlying operating performance and are better evaluated
separately. Moreover, management believes EBITDA from equity
investments is useful to investors because the Company's Lottery
business is conducted through a number of equity investments, and
this measure eliminates financial items from the equity investees'
earnings that management believes has less bearing on the equity
investees' performance. Management believes that free cash flow
provides useful information regarding the Company's liquidity and
its ability to service debt and fund investments. Management also
believes that free cash flow is useful for investors because it
provides them with an important perspective on the cash available
for debt repayment and other strategic measures, after making
necessary capital investments in property and equipment and
necessary license payments to support the Company's ongoing
business operations and taking into account cash flows relating to
the Company's equity investments. In the third quarter of 2020, we
recast free cash flow to adjust our previously used measure, free
cash flow, to exclude changes in restricted cash, substantially
associated with the recent expansion of iLottery operations, that
are impacting working capital, and align such calculation with the
revised management view and definition of such non-GAAP financial
measure. Such restricted cash is excluded because it is not
available to fund debt repayments or other initiatives and
therefore management believes this calculation better aligns with
the reason management uses this non-GAAP information.
Consolidated AEBITDA
Consolidated AEBITDA, as used herein, is a non-GAAP financial
measure that is presented as supplemental disclosure and is
reconciled to net loss as the most directly comparable GAAP
measure, as set forth in the schedule titled "Reconciliation of Net
Loss Attributable to SGC to Consolidated AEBITDA." Consolidated
AEBITDA should not be considered in isolation of, as a substitute
for, or superior to, the consolidated financial information
prepared in accordance with GAAP, and should be read in conjunction
with the Company's financial statements filed with the SEC.
Consolidated AEBITDA may differ from similarly titled measures
presented by other companies.
Consolidated AEBITDA is reconciled to consolidated net (loss)
income and includes net (loss) income attributable to SGC with the
following adjustments: (1) net income attributable to
noncontrolling interest, (2) restructuring and other, which
includes charges or expenses attributable to: (i) employee
severance; (ii) management restructuring and related costs; (iii)
restructuring and integration; (iv) cost savings initiatives; (v)
major litigation; and (vi) acquisition costs and other unusual
items; (3) depreciation and amortization expense and impairment
charges and goodwill impairments; (4) change in fair value of
investments and remeasurement of debt; (5) interest expense; (6)
income tax (benefit) expense; (7) stock-based compensation; (8)
loss (gain) on debt financing transactions; and (9) other expense,
net. In addition to the preceding adjustments, we exclude loss
(earnings) from equity method investments and add (without
duplication) our pro rata share of EBITDA of our equity
investments, which represents our share of earnings (whether or not
distributed to us) before income tax benefit (expense),
depreciation and amortization expense, and interest expense, net of
our joint ventures and minority investees, which is included in our
calculation of Consolidated AEBITDA to align with the provisions of
our long-term debt arrangements. AEBITDA is presented exclusively
as our segment measure of profit or loss.
Free Cash Flow
Free cash flow, as used herein, represents net cash provided by
operating activities less total capital expenditures (which
includes lottery, gaming and digital systems expenditures and other
intangible assets and software expenditures), less payments on
license obligations, less contributions to equity method
investments plus distributions of capital from equity investments,
and adjusted for changes in restricted cash impacting working
capital. Free cash flow is a non-GAAP financial measure that is
presented as a supplemental disclosure for illustrative purposes
only and is reconciled to net cash provided by operating
activities, the most directly comparable GAAP measure, in a
schedule above. In the third quarter of 2020, we recast free cash
flow to adjust our previously used measure, free cash flow, to
exclude changes in restricted cash, substantially associated with
the recent expansion of iLottery operations, that are impacting
working capital, and align such calculation with the revised
management view and definition of such non-GAAP financial measure.
Such restricted cash is excluded because it is not available to
fund debt repayments or other initiatives and therefore
management believes this calculation better aligns with the reason
management uses this non-GAAP information.
EBITDA from Equity Investments
EBITDA from equity investments, as used herein, represents our
share of earnings (whether or not distributed to us) plus income
tax expense, depreciation and amortization expense (inclusive of
amortization of payments made to customers for LNS), interest
(income) expense, net, and other non-cash and unusual items from
our joint ventures and minority investees. EBITDA from equity
investments is a non-GAAP financial measure that is presented as
supplemental disclosure for illustrative purposes only and is
reconciled to earnings from equity investments, the most directly
comparable GAAP measure, in a schedule above.
Net Debt and Net Debt Leverage Ratio
Net debt is defined as total principal face value of debt
outstanding, the most directly comparable GAAP measure, less cash
and cash equivalents. Principal face value of debt outstanding
includes the face value of debt issued under Senior Secured Credit
Facilities, Senior Notes and Subordinated Notes, which will all be
described in Note 15 of the Company's Annual Report on Form 10-K
for the year ended December 31, 2020,
but it does not include long term obligations under financing
leases or $7 million in proceeds
received in 2019 from transactions completed in 2018 which are
presented as debt. In addition, principal face value of debt
outstanding with respect to the 2026 Secured Euro Notes and 2026
Unsecured Euro Notes are translated at the constant foreign
exchange rate at issuance of these notes as those amounts remain
payable at the original issuance amounts in Euro. Net debt leverage
ratio, as used herein, represents net debt divided by Consolidated
AEBITDA (as defined above).
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SOURCE Scientific Games Corporation